This is a transcript, for the video found here:

Thanks for reading Inside China / Business! Subscribe for free to receive new posts and support my work.

Bullets:

The combined economies of NATO countries are 25 times the size of Russia’s, and NATO spends 14 times more on defense than Russia.

But Russia produces more tanks, armored vehicles, and rockets than all NATO countries combined, and can manufacture ammunition and artillery shells at an astounding four times the rate of all of NATO.

Russia believes the war in Ukraine is an existential conflict, and one they must win. But that fails to account for the enormous production advantages Russia enjoys over the West.

The Military Industrial Complex that serves the NATO alliance enjoys huge profit margins on the most expensive systems, such as F-35 aircraft, Ford-class aircraft carriers, and ballistic missile systems. These systems are chronically far over budget, far over time, and our policymakers are indifferent.

Long ago, the MIC abandoned the manufacture of basic weapons needed by front-line troops. What’s more, they long ago abandoned the supply chains required to build them, in the event they ever again needed to.

Our supply chains for all weapons now run through countries that are far more friendly to Russia than to us.

Report:

Good morning. NATO is waking up to the same problem that we Americans have had for decades. We spend a lot of money on defense, and don’t get anything for it. Our military contractors make money, while defense industries in the rest of the world make things their soldiers need.

This is the Chief of NATO, Mark Rutte. He says that Russia – one country – produces as much ammunition in 3 months than all of NATO – 32 countries – produces in a whole year. It’s not a problem of money: last year, Russia spent $145 billion on defense. European defense spending was three times that–$457 billion. That’s just Europe, and doesn’t include the almost one trillion dollars in Pentagon spending. Rutte says that Russia is using Chinese technology to build everything faster and cheaper, and Europe needs to do everything radically different. He says that the NATO alliance is way behind, and that things are getting worse—Russia is speeding up, not slowing down.

NATO’s economy combined is 25 times larger than Russia’s. But Russia builds more ammunition than all of NATO, times four. Euronews did some fact-checking, concluded the NATO Secretary is probably right about everything, but there are some signs that the gap could be closing. If that bit is supposed to cheer us up, the Western taxpayers who are wondering where our taxes our going—it won’t last long.

The report continues, and gets worse. Moscow has vastly increased production, and did so in a very short time. They multiplied their manufacturing of artillery rounds by more than eleven times in two years, according to estimates by the Estonian intelligence service.

Bain & Company did their analysis and found the same thing. And Bain’s report pointed to an even deeper problem: the ammunition Russia uses is four times less expensive than the ammo our companies like to build. $1,000 apiece, versus $4,000.

Somehow even the North Koreans have more artillery shells laying around to lend to their friends next door—South Korean intelligence says that 12 million rounds have been sent so far, and the Wall Street Journal saw satellite imagery that confirms huge new volumes of production in North Korea and shipments Russia’s way.

By comparison, Europe and the US combined for 1.2 million shells per year, compared to Russia’s 4.5 million. So that’s pretty close to what Mr. Rutte said. But we’ve got a lot of questions about North Korea, if it’s true they just loaned their Russian buddies 10 years’ worth of NATO’s production of artillery shells. So NATO then knows there is a huge problem, and have set some targets—to ramp up production in Europe to 2 million rounds per year this year, 2025, while the US set a new target of 100,000 rounds per month. Remember again that these rounds are costing our taxpayers four times more than what the Russians pay. And setting targets doesn’t mean they’re going to be met, and in the past they have not been. The EU promised to send Ukraine a million shells last year, and didn’t make it. Kiev needs 200,000 a month just to keep its head above water along the front lines, and NATO is far behind. “Still struggling to get its ammunition industry doing.” There is a severe shortage of explosives, there is just one factory in Poland that makes TNT. China also has strict export bans on antimony, and defense contractors everywhere are scrambling around, looking for sources of that.

So we are treated to stories like this one, from November. Lithuania announced a sizable project to bolster its defense capabilities. Sizable means big. It will be a cutting-edge production facility for 155-mm artillery. It will begin production in mid-2026, and will have the capacity to produce tens of thousands of shells per year. So we know it’s under 100,000 shells per year, or they would have said so. But let’s pretend they will make 100,000 shells per year. At 120 years of full production, this plant in Lithuania will finally equal what North Korea already had, extra, in surplus, to help out their Russian friends.

This analysis here we like, from last August. William LaPlante is an official in acquisitions, and says that NATO weapons makers aren’t doing a lot of weapons making. Our defense industrial base is unimpressive, especially to the guys who work in it. Russia builds more ammunition, rockets, and tanks despite spending one fourteenth what the NATO alliance does.

Two strong reasons: the US and NATO aren’t taking the war very seriously, and the Russians are. And the contractors for the Pentagon make money, no matter what happens. The Military Industrial Complex loves the big programs that cost a lot of money—the F-35, Gerald Ford aircraft carriers, big missile systems. They’re super expensive, they’re always late, and always over budget, and nobody cares.

Our military leadership doesn’t seem to have its priorities quite right either—the Army cut back production of artillery shells, by half, to 6,200 per month, just a few months before the Ukraine War began. But it’s hard to imagine even hitting those lower targets. The plant that was supposed to build them is 10 years behind schedule while its cost doubled. In other words, very late and way over budget. In other words, just like everything else we do.

That facility in Lithuania, this one in Virgina, when we finally do get the bricks laid and hire some people to start screwing bombs together, we need China and India—other important friends of Russia—for the materials and chemicals to build them.

Add all that up, if everything goes according to our plan, and we get the facilities built, and for some reason the Chinese and the Indians allow us to buy what we need to make artillery shells that can be used against their friends in Russia, the total production is 2 million per year by the end of 2025. But Russia’s at 3 million.

The plan sounds good in theory, because that’s all it is—but the production rates we announce never happen. And “by he end of 2025, the war in Ukraine may already be lost.” “No forward thinking and a defense industry that thinks only of profits.” August 2024. This one aged pretty well.

Be Good.

Resources and links:

Russia produces as much ammo in 3 months as all of NATO does in a year, says NATO chief

https://www.businessinsider.com/russia-ammunition-production-nato-mark-rutte-2025-6

Why Russia is far outpacing US/Nato in weapons production

https://responsiblestatecraft.org/russia-ammunition-ukraine/

NATO State Announces New $190 Million Artillery Ammo Plant

https://www.newsweek.com/lithuania-nato-new-artillery-ammunition-plant-1993469

Is Russia producing a year’s worth of NATO ammunition in three months?

https://www.euronews.com/my-europe/2025/07/16/is-russia-producing-a-years-worth-of-nato-ammunition-in-three-months

Thanks for reading Inside China / Business! Subscribe for free to receive new posts and support my work.


From Inside China / Business via this RSS feed